The FINANCIAL — National Bank of Georgia for the last two years, with support of International Monetary Fund (IMF) and European Bank of Reconstruction and Development (EBRD) and cooperation with consulting company OGResearch developed project, which aims to improve macroeconomic modeling and forecasting methods.
In this project consulting company is represented by former employees of central bank Czech Republic.
Within the project framework the new macroeconomic modeling infrastructure for National Bank of Georgia was designed and human capacity was improved. Specifically, “New Keynesian General Equilibrium Macroeconomic Model” (NKDSGE) was developed taking into account specifics of Georgian economy. This type models are vastly employed by major central banks as tools of macroeconomic forecasting.
The project also implies improving communication about monetary policy. In this respect major communication document for monetary policy, the “Inflation Report” structure will be amended. The updated Inflation Report will be released in February. It will be focused on forecasts and analysis. The release dates of Inflation Report will be changed as well; namely, instead of three months after end of quarter it will be released in the second month of reporting quarter. Moreover, release of inflation report will be followed by presentation to analysts. In addition, after monetary policy committees press conferences will be held to provide detailed information about decisions and forecasts.
During the last week the representatives of consulting company OGResearch are visiting Georgia, among them the former governor of the central bank of Czech Republic Zdenek Tuma, currently director of KPMG. He was also a member of high level experts’ group of the European Commission (so called Liikanen Group), which was working on reforming the banking sector in European Union. Furthermore, partner of consulting company OGResearch, Ondra Kamenik is also participating in the visit. He was employee of central bank of Czech Republic and International monetary Fund at different times.
As National Bank of Georgia said, Ondra is one of a world leading developer of macroeconomic forecasting and modeling solutions and software for Central banks and Governments. During the visit meetings were held with representatives of commercial banks, academics, government and press. The purpose of meetings was assessment of recognition of monetary policy of national bank, and announcement of information about the future plans.“The National Bank of Georgia has moved to inflation targeting regime accompanied by the floating exchange rate, which is a prevailing regime of monetary policy in most central banks. NBG carried out substantial reform of the monetary policy during the recent years that resulted in improved efficiency of the policy. This includes implementation of new instruments, development of money markets and forecasting models and capabilities. For further improvement it is necessary that NBG continues actions towards full-fledged inflation targeting that will be supported by active communication with regard to monetary policy”, Mentioned Zdenek Tuma during the meeting with media representatives.
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